Perth market poised for new growth period
A housing industry identity has raised the prospect of the Perth market entering a new growth phase, outlining historical trends that peg the city’s performance to Sydney's market.
Western Australian property entrepreneur and director of Nicheliving, Ronnie Elhaj, believes that when the current boom phase in Sydney comes to an end it has the potential to trigger an increase in growth in the Perth property market.
In a press release, Mr Elhaj cited the boom in Sydney from 2000 to 2004 as a precedent.
“In 2004, as Sydney came to the end of a four-year property boom in which prices grew by 72 per cent, Perth kicked in with its own four-year boom which saw prices grow by a whopping 110 per cent,” the release reads.
“For the next eight years to 2012 the Sydney market grew slowly by just 20 per cent, before rocketing ahead to grow by more than 50 per cent in the three years since,” Mr Elhaj said. “Similarly, after its boom ended in 2007, Perth prices have grown by about 17 per cent in the eight years to today.”
The current low rate of interstate migration away from New South Wales, a net loss of 6800 in the past year, is a strong indication of where it sits in the cycle, according to Mr Elhaj.
“Perth’s 2004 to 2007 boom was initially fuelled by buyers from Sydney and other capitals, but as the market started its stellar growth in came foreign investors and migrants.
“For example, net migration to WA from overseas grew to 40,000 a year, with net interstate migration adding a further 6000 people annually. At the same time NSW suffered a net drain of 30,000 people a year to other states.”
Based on the increasing strength of its trade relationship with Asian neighbours and the link to the Sydney market, Mr Elhaj predicts that the Perth market will enter a new gain phase within two to five years.